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Endocyte (ECYT) Stock Up Despite Wider-than-Expected Q2 Loss


Endocyte, Inc. ECYT reported a loss of 28 cents per share in second-quarter 2017, wider than the Zacks Consensus Estimate of a loss of 25 cents but narrower than the year-ago loss of 33 cents. Collaboration revenues, on the other hand, remained flat at $0.013 million in the quarter.

The company’s shares were up 2.8% in after-market trading on Aug 8, in spite of the company reporting wider-than-expected loss. However, Endocyte’s share price has decreased 44.3% year to date, significantly underperforming the industry, which gained 0.2%.

Quarterly Details

Research and development (R&D) expenses were up 27.5% year over year to $8.7 million mainly due to severance for workforce reduction as part of the company’s restructuring, costs related to termination of EC1456 study and impairment charges.

General and administrative expenses were down 55.3% to $7.4 million due to lower compensation expense.

Pipeline Update

In Jun 2017, Endocyte announced some restructuring initiatives including 40% reduction in workforce and a shift in pipeline focus.

The company plans to shift focus to its most promising programs, which include the chimeric antigen receptor T-cell SMDC adaptor platform, the dual-targeted DNA crosslinker drug EC2629, and the cohort of taxane-exposed patients receiving EC1169.

EC1169 is currently being evaluated in a two-part phase Ib study for taxane-exposed metastatic castration-resistant prostate cancer (mCRPC). Endocyte has completed the first part of the study, which determined the maximum clinical dose (6.5 mg/m2) and recommended phase II dose of EC1169. It is currently enrolling patients in the second part of the study, which will evaluate radiographic progression free survival in mCRPC patients with PSMA-positive. The enrollment is expected to be completed in the third quarter with updated interim data expected in September.

The company has stopped enrollment in the cohort of taxane-naïve mCRPC patients during the quarter.

Further, the company also announced its plans to stop enrollment in the EC1456 trial in non-small cell lung cancer patients. However, the company is continuing the study of EC1456 in ovarian cancer patients.

The company filed an Investigational New Drug (IND) application for EC2629 during the quarter and is planning to initiate a phase I study soon. The study will evaluate the candidate in cancer patients with positive folate receptor where Tumor-associated macrophages (TAMs) are known to be prevalent in the tumor.

2017 Outlook

With the restructuring and pipeline shift, the company expects its cash balance at the end of 2017 to be approximately $105 million, up from its previous expectation of $100 million

Endocyte, Inc. Price, Consensus and EPS Surprise

Endocyte, Inc. Price, Consensus and EPS Surprise | Endocyte, Inc. Quote

Zacks Rank & Stock to Consider

Endocyte carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the pharma sector include Summit Therapeutics PLC SMMT, Aduro Biotech, Inc. ADRO and Enzo Biochem, Inc. ENZ. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Summit’s loss estimates narrowed from $2.59 to 32 cents for 2017 over the last 60 days. The company delivered positive earnings surprise in each of the four trailing quarters with an average beat of 25.55%. Its share price is up 66.6% so far this year.

Enzo Biochem’s loss estimates narrowed from 12 cents to 7 cents for 2017 over the last 60 days. The company came up with a positive earnings surprise in all the four trailing quarters with an average beat of 55.83%. The stock is up 62.7% so far this year.

Aduro Biotech’s loss per share estimates narrowed from $1.46 to $1.36 for 2017 over the last 30 days. The company delivered a positive surprise in two of the four trailing quarters with an average beat of 2.53%. The stock is up 7.9% so far this year.

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